To v Choi[2011] QSC 2

SUPREME COURT OF QUEENSLAND

[1] FRYBERG J:  The plaintiff, Ms Mee Wah To (“the landlord”), owns a block of land at 33 Lisson Grove, Wooloowin.  There is a two storey building on that land.  She previously lived on the upper floor with her son John Miu.  On part of the ground floor John’s company, Miu’s Pty Ltd, conducted a convenience store.  On another part of that floor was the residence of the landlord’s husband (and John’s father) George Miu, apparently as a tenant at will.

[2] In July 2009 negotiations took place between the defendant, Ms Eugene Choi (“the tenant”) and her partner Jeong Yeun Moon on the one hand and John Miu on behalf of the company on the other regarding the sale of the convenience store.  The tenant and Mr Moon inspected the premises in that month.  A considerable amount of what was said on that occasion is hotly disputed but it was not disputed that John told the tenant his mother and he would vacate the upstairs residential unit if she wished also to rent that unit.  By a contract dated 28 September 2009 the tenant agreed to purchase the business from the company subject to a condition that the landlord grant her a new lease of the premises from which the business was conducted.  She also agreed with the landlord to rent the upstairs unit.

[3] A form of lease for the store had been prepared by the landlord’s solicitors on her instructions earlier that September.  It was signed by the tenant on 24 September and by the landlord on 28 September.  It was for a term of five years with one option of five years to follow.  The description of the premises being leased was, “That part of the ground floor of the Building erected on the Land as more particularly shown on the plan annexed and hatched in black”.  On that plan the area hatched was the whole of the interior of the ground floor of the building.  The lease was duly registered.

[4] In due course the tenant was given possession of the shop and the upstairs unit, into which she moved with Mr Moon.  George Miu continued to occupy part of the ground floor of the building.  Despite this, the tenant was charged 100% of the outgoings incurred by the landlord for the whole building.  Under the convenience store lease she was liable for 51.57% of those outgoings.  It does not appear from the evidence whether she was liable for any outgoings under the arrangement relating to the upstairs unit.

[5] In March 2010 the tenant obtained a copy of the lease relating to the store from the managing agent and shortly afterwards enquired why she was paying all of the outgoings when the lease provided for her to pay for only 51.57% of them.  It seems that then or shortly thereafter she asserted for the first time the right to occupy the whole of the ground floor under the convenience store lease.  In April the landlord responded that she had no such right, and that the plan annexed to the lease was erroneous.

[6] Shortly after 17 May 2010 the landlord served on the tenant a notice bearing that date to remedy breach of covenant, purportedly under s 124 of the Property Law Act 1974.  The notice claimed that the tenant owed the landlord $1,039.50.  It is common ground that this sum is the total of two amounts of legal fees charged by the landlord’s solicitors.

[7] On 24 May the tenant lodged a notice of dispute with the chief executive under s 55 of the Retail Shop Leases Act 1994 (“the RSL Act”).  The points of claim attached to that notice identified two or perhaps three disputed claims: the tenant’s claim relating to the area properly the subject of the lease (with a consequential claim for mesne profits or rent); and the landlord’s claim for legal fees allegedly incurred by her.  The relief sought was, in summary:

(a) a declaration that by the lease the landlord had leased the whole of the ground floor to the tenant;

(b) an injunction requiring the landlord to do everything necessary to deliver up possession of the whole of that area;

(c) an injunction restraining the landlord from interfering with the tenant’s exclusive possession and quiet enjoyment of that area;

(d) an order for payment of mesne profits or rent and compensation in the nature of interest thereon from 1 October 2009;

(e) a declaration that the tenant was not required to pay the amounts claimed by the landlord for legal fees; and

(f) a declaration that the notice under s 124 of the Property Law Act 1974 was invalid.

As contemplated by div 2 of pt 8 of that Act a mediation conference was held, but the disputes were not resolved.  Consequently the mediator referred the disputes to QCAT pursuant to s 63 of the Act.

[8] At a directions hearing on 8 September 2010 the landlord foreshadowed an application to QCAT for the matter to be transferred to the Supreme Court under s 52 of the Queensland Civil and Administrative Tribunal Act 2009.  QCAT gave directions in relation to any such application and on 21 September the landlord filed it.  On the same day she commenced the present proceedings in this Court by claim and statement of claim.[1]  In QCAT she sought first, an order that the proceedings be transferred; alternatively an order that they be dismissed or struck out; and in the further alternative an order that they be stayed or adjourned until the determination of the Supreme Court proceedings.  QCAT made the third of those orders on 5 November 2010.

[9] In the meantime, on 18 October the tenant filed a conditional notice of intention to defend in the Supreme Court proceedings and on 1 November, as required by r 144 of the Uniform Civil Procedure Rules, filed an application under r 16 for a declaration that the proceeding had not been properly started in this Court for want of jurisdiction and for an order dismissing it.  It is that application which is now before me.

The present application

[10] The basis for the tenant’s assertion of want of jurisdiction in this Court is s 94(1) of the RSL Act:

“94Exclusion of other jurisdictions

(1)On and after the lodgement of a dispute notice for a retail tenancy dispute, the dispute must not be referred to arbitration or heard by any court.

(2)Subsection (1) does not apply if—

(a)the notice of the dispute is withdrawn under section 91 or the referral of, or application for, the dispute is withdrawn under the QCAT Act; or

(b)a proceeding about the issue in dispute was started in a court before the dispute notice was lodged and the proceeding has not been removed, or transferred, to QCAT; or

(c) an application for an order in the nature of an injunction about the issue in dispute is made to a court; or

(d)a mediator or QCAT refuses to mediate or hear the dispute because the mediator or QCAT is of the opinion the dispute is not within the jurisdiction of a mediator or QCAT; or

(e)the mediator can not reach a solution to the dispute and QCAT does not have jurisdiction to hear the dispute.

(3)For subsection (2)(b), a proceeding is taken to have been started before a court if the lessor has—

(a)served on the lessee a notice under section 124 of the Property Law Act 1974; or

(b)given to the lessee a notice under section 131 of the Property Law Act 1974.

… .”

[11] It is convenient to put to one side some issues which do not arise in this case.  First, the landlord does not suggest that the case is one falling under s 94(3)(a) of the RSL Act.  Such a submission was made to QCAT on the application referred to above,[2] in support of an argument that this Court would have jurisdiction to hear the proceedings if they were transferred from QCAT, by reason of the exception contained in s 94(2)(b) of the Act.  Whether this omission is because there is some defect in the notice of 17 May or because the landlord now concedes that the tenant is not liable for the legal fees or for some other cause is not apparent from the material.

[12] Second, the landlord disclaimed reliance on any argument that a claim for rectification of a lease was an application for an order in the nature of an injunction within the meaning of s 94(2)(c).  It is therefore unnecessary to consider whether “application” in that paragraph has the same narrow meaning it has under the Uniform Civil Procedure Rules.

[13] The first issue under s 94(1) is whether there has been a lodgement of a dispute notice for a retail tenancy dispute.  The second issue is whether the same dispute will be heard in the Supreme Court proceedings.  The first issue raised two questions: was there a retail tenancy dispute; and was there a dispute notice for such a dispute.  The landlord did not suggest that there was any defect in the lodgement of the notice.

Retail tenancy dispute

[14]  “Retail tenancy dispute” is defined in the dictionary for the Act:

“retail tenancy dispute means any dispute under or about a retail shop lease, or about the use or occupation of a leased shop under a retail shop lease, regardless of when the lease was entered into.”

“Retail shop lease” means “a lease of a retail shop”, with certain presently irrelevant exceptions.  “Retail shop” means, so far as is relevant, “premises that are … used wholly or predominantly for the carrying on of 1 or more retail businesses.”  The regulation made under the Act includes “convenience or mixed business” in the definition of “retail business” for the Act.  The tenant uses the leased premises wholly or predominantly for carrying on such a business.  Consequently the lease is a retail shop lease.  So much was common ground between the parties.  As will appear, however, the parties were not using the word “lease” in identical senses.[3]

Identifying the dispute before QCAT

[15] Where the parties parted company was over the identification of the dispute or disputes before QCAT and this Court.  The tenant submitted that the relevant dispute before QCAT was to be characterised as a retail tenancy dispute because it was “about whether the Lease is for the 148 m2 set out in the plan annexed to the Lease, or for the lesser area … contended for by the Plaintiff”.  The landlord submitted that there was no dispute about what was in fact the area included in the lease.  The tenant had an indefeasible lease of the whole of the ground floor.[4]  Rather, the dispute was about whether the lease should be rectified.  She submitted that the content of the dispute should be identified by reference to the relief sought.

[16] Perhaps surprisingly, the parties have not referred me to any authorities discussing the identification of the substance of a dispute.  “Dispute” is not a defined term in the RSL Act.  With some hesitation I shall proceed on the basis that it is common ground between the parties that any cases on that point in other contexts, eg arbitration, are unhelpful for present purposes.

[17] I reject the submission that a dispute brought before a court or tribunal is to be identified solely by having regard to the relief sought.  No authority was cited for the landlord’s submission and nothing in the RSL Act supports it.  I see no reason to limit the evidence on which the process of identification is to be based.

[18] One difficulty which obviously arises in identifying the dispute before QCAT is that the landlord has not filed a response to the tenant’s points of claim notwithstanding the time limit of 28 days prescribed by r 44 of the Queensland Civil and Administrative Tribunal Rules 2009.  In apparent accordance with QCAT practice the tenant has attached correspondence between the parties to her notice of dispute.  This helps to identify the dispute.  She has also referred to the dispute in her points of claim.  The affidavits filed in this application on behalf of the landlord indirectly respond to a number of the allegations.  I am satisfied that this material is sufficient to enable the dispute in QCAT to be identified.

[19] Under the heading “Claim relating to the area of the premises”, the points of claim allege a number of uncontentious facts about the formation and content of the lease.[5]  Paragraphs 9 and 10 were as follows:

“9.On 8 April 2010, by a letter from her solicitors, Gerard Batt & Associates, to the claimant’s solicitors, Colwell Wright, the respondent:

9.1alleged that she had agreed to lease to the claimant only 36m2; and

9.2advised that she was obtaining a new survey plan of the Premises to reflect that it comprised only 36m2;

9.3enclosed a Notice of Entry for the purposes of permitting a surveyor engaged by her to enter the Premises to carry out the survey required to prepare the plan mentioned in 8.2 above;

9.4advised that she would be attending to registration of the plan showing the area of the Premises as 36m2; and

9.5demanded that the claimant not demand payment or possession from the respondent’s tenant, George, for his occupation of part of the Premises.

10.On 12 April 2010, by letter from Colwell Wright to Gerard Batt & Associates; the claimant:

10.1disputed that the area of the Premises had been agreed at 36m2;

10.2disputed that the Notice of Entry referred to in 9.3 was issued pursuant to the Lease; and

10.3asserted a right to claim possession of, and rental for, the part Premises occupied by the respondent’s tenant.”

The existence of these letters appears to be verified by the uncontradicted affidavit material and the landlord’s written submissions provided to QCAT at the time of the transfer application.  A plan attached to a letter from the landlord’s solicitors to the tenant’s former solicitors graphically depicts the landlord’s contention that the area agreed to be leased included neither the residential area and garage occupied by George Miu nor the shop extension and new enclosed area as thereon depicted.  By paras 11 to 13 the tenant asserted an entitlement to exclusive possession of the whole of the ground floor and liability on the part of the landlord for mesne profits or rent in respect of that part of the floor not in her possession.  The first four paragraphs of the relief sought reflected these allegations.[6]

[20] The landlord’s submissions to QCAT in reply to those of the tenant included this paragraph: “3. The terms of the ‘dispute’ are set out in the [tenant’s] ‘POINTS OF CLAIM’ attached to the Notice of Dispute filed on or about 25 May 2010”.

[21] I am satisfied that the essence of the relevant dispute between the parties in QCAT is how much of the interior of the ground floor of the building was agreed to be leased.  That is not a dispute about the content of the lease document.  It is a dispute about what was agreed to be included in the lease document.

[22] That conclusion highlights the ambiguity in the common acceptance by the parties that the lease in this case was a retail shop lease.  If the expression “lease of a retail shop” in the definition of “retail shop lease” referred only to the lease document I would be doubtful that this dispute was truly one about a retail shop lease.  However in my judgment “lease” should not be given such a narrow meaning.  I am satisfied that the word is used in a wider sense, to describe the nature of the arrangement between the parties.  In that sense it is apt to refer to an agreement for a lease.[7]  Putting it another way, the statutory term embodies the principles developed in equity on this topic.

Conclusion

[23] The dispute before QCAT is accurately described as a dispute about a retail shop lease and probably as one about the use or occupation of a leased shop under such a lease.  It is a retail tenancy dispute within the meaning of the RSL Act.

Dispute notice

[24] “Dispute notice” is defined only by reference to s 55.  That section provides:

“55Lodgement of retail tenancy disputes

(1)A party to a retail tenancy dispute that is within a mediator’s jurisdiction under section 97 may lodge notice of the dispute with the chief executive.

(2)The notice (dispute notice) must be in the approved form and accompanied by the fee prescribed by regulation.”

The parties have argued this matter on the basis that to constitute a dispute notice, the notice must have been one permitted to be lodged by s 55(1).  The only matter debated was whether the dispute about the area included in the lease was one within a mediator’s jurisdiction under s 97.

The mediator’s jurisdiction

[25] Section 97 of the RSL Act provides, as far as is relevant:

“97Mediators’ jurisdiction

(1)A mediator has jurisdiction to mediate retail tenancy disputes, other than a retail tenancy dispute—

(a)about an issue between the parties that—

(i)…; or

(ii)…; or

(iii)is before, or has been decided by, a court; or

(b) …; or

(c) … .”

It is worth noting that jurisdiction is conferred on QCAT in identical terms, save that QCAT’s jurisdiction is excluded in cases where the amount, value or damages in dispute is more than the monetary limit under s 68 of the District Court of Queensland Act 1967.[8]

[26] The landlord submitted first, that this jurisdiction was impliedly limited by s 83(2)(i); and second, that because the issue of whether the area agreed to be leased was the whole of the interior of the ground floor of the building was before the Supreme Court in the present proceedings, the mediator’s jurisdiction was excluded by s 97(1)(a)(iii).

Section 83(2)(i)

[27] Section 83(2)(i) materially provides:

“83QCAT orders

(1)Subject to subsection (3), QCAT may make the orders, including declaratory orders, QCAT considers to be just to resolve a retail tenancy dispute.

(2)Without limiting subsection (1), QCAT may make any 1 or more of the following orders—

… ;

(i)with consent of the parties to the dispute—an order to rectify the lease;

… .”

[28] At first sight it is not clear how a provision which confers a power on QCAT to make an order can be said to impair the jurisdiction of a mediator.  The submission was not elaborated, but as best I can understand it, it is this.  The power to order rectification of a lease exists only where the parties consent to that order.  QCAT otherwise has no jurisdiction to order rectification.  That statutory limitation would be frustrated if QCAT could, by a combination of declarations and orders in personam achieve the same result indirectly.  It follows that the general words of s 103(1) conferring jurisdiction on QCAT contain an implied exclusion of disputes which are essentially about rectification.  Section 97(1) is in terms which are materially identical to those of s 103(1).  Consequently it too must be subject to the same implied exclusion.  The dispute in QCAT is essentially a dispute about rectification, so it is excluded from the mediator’s jurisdiction.

[29] That submission fails at several points.  First, I have already found that the essence of the relevant dispute before QCAT is how much of the area of the ground floor of the building was agreed to be leased.[9]  It is not a dispute about rectification as such.  There is no suggestion by the landlord that she is still entitled to rectification if her version of the agreement is rejected, nor is there any suggestion by the tenant that the landlord is not entitled to rectification if her (the tenant’s) version is rejected.  Second, QCAT’s jurisdiction under s 103(1) is not limited in the manner submitted. Had that been the intention of the statute, one would have expected the limitation to appear in the list of exceptions in that provision.[10]  Section 83(1)(i) is concerned with the narrower question of what orders QCAT can make.  That question arises only after QCAT has exercised its jurisdiction.  It is unnecessary to deal with the third question which might (improbably) arise, namely what course QCAT should take should it find for the landlord and the tenant still refuse to consent to the form of order.

Section 97(1)(a)(iii)

[30] As will appear, I accept that the real dispute the subject of the Supreme Court proceedings is also how much of the area of the ground floor of the building was agreed to be leased.  That is not quite the same thing as saying that this question is an issue in the Supreme Court proceedings.  “Issue” has a technical meaning.  It refers to a point which the parties have chosen to litigate, as demonstrated by the pleadings.  It is difficult to see how something can be an issue between parties before each has filed a pleading.  However let it be assumed for present purposes that the question which constitutes the real dispute between the parties also constitutes an issue within the meaning of s 97(1).

[31] The question then is whether that issue was before the Supreme Court.  The question must be answered by reference either to the date of lodgement of the dispute notice or at the latest the date of the mediation hearing.  The terms of s 55 suggest the former date, but it is unnecessary to determine the matter.  On no view was the issue before the Supreme Court on either date.

Conclusion

[32] It follows that there has been a lodgement of a dispute notice for a retail tenancy dispute within the meaning of s 94(1) of the RSL Act.

The Supreme Court proceedings

[33] The second issue is whether the same dispute will be heard in the Supreme Court proceedings.  No defence has been filed, so the question cannot be answered simply by reference to the pleadings.

[34] The statement of claim is not free from difficulty.  Although it alleges that in the discussions between John Miu and the tenant and Mr Moon, John was acting on behalf of the landlord, it does not allege that any agreement for the granting of a lease was reached during the discussions.  Rather, it asserts:

“20.By a registered lease, dated 28 September 2009, between the [landlord] and the [tenant], the [landlord] agreed to lease to the [tenant] ‘that part of the ground floor of the Building erected on the Land as more particularly shown on the plan annexed and hatched in black’.”[11]

The statement of claim proceeds to allege the existence at all times up to and including the execution of the lease of a common intention of the parties that the area to be leased was the area comprising the convenience store only, being an area of 42 m².  That allegation appears on its face to be inconsistent with the assertion that the landlord agreed to lease the area in the plan annexed to the lease.  A plan annexed to the statement of claim shows that the landlord is maintaining her original contention about the area agreed to be leased;[12] she contends for the area described in para [19]. In other words, she contends that the lease does not include not only the area occupied by George Miu, but also the “shop extension” and “new enclosed area”.

[35] It is clear from Mr Moon’s affidavit filed on behalf of the tenant that she still alleges the intention and agreement were to lease the whole of the ground floor.  He deposed that John Miu drew a sketch plan “including the whole of the downstairs area of the building at 33 Lisson Grove”.  He continued, “Mr Miu said to us that the [tenant] would be leasing the whole of that area.”  Just what is depicted in that sketch plan will doubtless be an issue in the proceedings.

[36] The statement of claim then alleges that the plan annexed to the lease showed the whole of the ground floor as the leased area by an oversight common to both parties.  Alternatively it alleges that the tenant either knew or ought to have known that the wrong drawing had been annexed to the lease and that it was unconscionable for her to seek to rely upon the lease to assert an entitlement to occupy the whole ground floor area.  In the further alternative it alleges that no agreement was reached between the parties as to the area demised

[37] On the basis of the first set of allegations the plaintiff claims rectification of the lease and a declaration of error in the existing lease.  On the basis of the alternative set of allegations she claims a declaration pursuant to ss 185(1)(g) and 187 of the Land Title Act 1994 that the tenant’s interest in the lot wrongly includes land in which the landlord has an interest and an order correcting the plan.  On the basis of the second alternative set of allegations she claims either a declaration that there is no lease and an order cancelling the registered lease.

[38] In my judgment the real dispute raised by this pleading, as best it can presently be discerned, is how much of the interior of the ground floor of the building was agreed to be leased.  That is the same dispute as is pending before QCAT.  Possibly the Supreme Court proceedings raise an additional matter of dispute to cover the contingency that it is held that there was no agreement about the area to be leased, but that is not alleged as a separate dispute standing by itself.  As to the other alternative basis of the claim, it is difficult to see how a distinct dispute about unconscionability could arise,[13] but in any event the claim on that basis is particularised as arising from the same facts as those which give rise to the claim for rectification.

[39] The landlord submitted that the inclusion of a prayer for relief under the Land Title Act 1994 showed that the dispute before the Supreme Court was in fact a different dispute.  I have already rejected the submission that a dispute is to be identified solely by reference to the relief sought.  Relief under s 187 of that Act would not be available to the landlord in QCAT.  That fact colours the characterisation of the dispute but does not control it.  It is important to note that the landlord could not obtain a remedy under that section unless she proved that the tenant’s interest wrongly included land in which she (the landlord) had an interest.  That interest would be wrongly included only if the landlord’s version of the agreement between the parties were accepted.[14]  That involves essentially the same dispute as the claim for rectification.

Conclusion

[40] Section 94(1) of the RSL Act operates to prevent this Court from hearing the dispute which is the subject of the claim and statement of claim.

Form of order

[41] The application seeks a declaration that this proceeding has not, for want of jurisdiction, been properly started in this Court.  It obviously is based on r 16(a) of the Uniform Civil Procedure Rules.  The landlord submitted that even if s 94(1) operated as I have held, it did not deprive this Court of jurisdiction in the matter.  She submitted that the subsection prohibited only the hearing of the dispute in this Court, not the institution of proceedings involving it.  In this respect it contrasted with the prohibition on the referral of the dispute to arbitration.  The tenant submitted that this was too narrow a reading of the subsection.  Permitting the institution of proceedings in this Court would give rise to an anomalous situation by reason of s 103(1)(a)(iii) of the RSL Act: neither the Court nor QCAT would be able to hear the dispute.  In the alternative she submitted that the effect of the subsection was to deprive the Court of jurisdiction to hear the matter.

[42] The force of the landlord’s submission cannot be denied.  Moreover the anomaly referred to in the tenant’s submission could be overcome by a narrow reading of “before a court” in s 103(1)(a)(iii); a matter might be said to be before the court only if it were in the course of being heard or, perhaps, about to be heard.  On the other hand, the common law has never adhered to a rigid concept of jurisdiction.  “Jurisdiction is a protean term that ‘is used in a variety of senses and takes its colour from its context’, as Diplock LJ pointed out when Anisminic Ltd v Foreign Compensation Commission was in the English Court of Appeal”.[15]  It may be that the operation of s 94(1) can be said to deprive the Court of jurisdiction within the meaning of r 16(a). 

[43] I do not find it necessary to resolve the point.  Even if a declaration were made in the terms sought, it would still be necessary to make a further order disposing of the proceedings.  Indeed, I am somewhat doubtful as to the utility of a declaration.  Rule16(i) permits the Court to make any order it thinks appropriate.  The appropriate orders in the present case seem to be (subject to the parties’ submissions), either an order striking out the claim or an order pursuant to s 53 of the Queensland Civil and Administrative Tribunal Act 2009 transferring the proceeding (or that part of it which does not include the making of the orders sought in paras (a), (c), (d) and (g) of the claim) to QCAT.  If the landlord is successful in the proceedings, I expect that the tenant will consent to an order for rectification of the lease and to whatever other personal orders might be necessary to correct the register.

[44] I shall hear the parties on the form of order and on costs.